Correlation Between SunLink Health and Juniata Valley

Can any of the company-specific risk be diversified away by investing in both SunLink Health and Juniata Valley at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SunLink Health and Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SunLink Health Systems and Juniata Valley Financial, you can compare the effects of market volatilities on SunLink Health and Juniata Valley and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SunLink Health with a short position of Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and Juniata Valley.

Diversification Opportunities for SunLink Health and Juniata Valley

-0.33

Correlation Coefficient

SunLink Health  Juniata Valley

Very good diversification

The 3 months correlation between SunLink and Juniata is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and SunLink Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SunLink Health Systems are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of SunLink Health i.e., SunLink Health and Juniata Valley go up and down completely randomly.

Pair Corralation between SunLink Health and Juniata Valley

Considering the 90-day investment horizon SunLink Health Systems is expected to under-perform the Juniata Valley. In addition to that, SunLink Health is 1.82 times more volatile than Juniata Valley Financial. It trades about -0.02 of its total potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.16 per unit of volatility. If you would invest  1,118  in Juniata Valley Financial on August 30, 2024 and sell it today you would earn a total of  157.00  from holding Juniata Valley Financial or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SunLink Health Systems  vs.  Juniata Valley Financial

SunLink Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunLink Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SunLink Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Juniata Valley Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SunLink Health and Juniata Valley

The main advantage of trading using opposite SunLink Health and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, Juniata Valley can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Juniata Valley will offset losses from the drop in Juniata Valley's long position.

The idea behind SunLink Health Systems and Juniata Valley Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.